Buzz: Orange County sales of homes and new vehicles both fell in 2018, the first time they’ve declined in tandem since the Great Recession was brewing a decade ago.

Source: CoreLogic, Orange County Auto Dealers Association.

Trend reported: Orange County homes sales fell 8 percent in 2018. Vehicle sales were down 2 percent. Last time these widely watched, big-dollar purchases both dropped locally? The year of financial panic, 2008!

Dissection

Buying a home or a new car are big financial commitments. When the trend lines for these purchases are both downward, at a minimum, it’s time for economic reflection.

Everything from business-climate worries to political uncertainty to higher loan rates hurt both real estate and auto markets. Real estate’s been slow to react (psst! discounting), especially when compared with auto dealers.

That pricing gap may account for housing’s more dramatic gyrations: Orange County’s 8 percent sales drop last year — the first decline since 2014 — was more eye-catching than local auto dealers’ three consecutive years of dips that added up to a 6 percent fall.

Let’s not forget the Great Recession, our a benchmark for high economic disaster. We’re nowhere near there.

Local sales of homes and vehicles were both cut by half after 2005. It took housing sales three years to fall that far vs. four years for autos.

The recovery, however, was never “complete” for homes and autos. That might be reassuring as current sales activity could be a “new normal,” not a dark cloud.

Neither Orange County housing or auto sales have yet topped 2005’s levels. Home sales aren’t even close with last year’s total 35 percent below that high. Autos have come closer, with sales last year running 7 percent below 2007.

Does housing’s much-debated “shortage” of “affordable” homes explain this gap? Or has the auto industry been more aggressive in selling recently?

Another view

John Sackrison, president of Orange County Auto Dealers Association, chooses to focus on the recent minor drops in business vs. the ugliness of a decade ago.

Yes, if his association’s forecast holds true, 2019 will be the fourth consecutive down year for local sales (off 2.7 percent). But he notes it will also be the sixth consecutive year with local sales above 175,000 — a “really healthy level” of business to his eyes.

“This is a cyclical industry,” Sackrison says. “We love this sort of trend because you can plan for it. Double-digit declines are much harder to adjust to.”

How bubbly?

On a scale of zero bubbles (no bubble here) to five bubbles (five-alarm warning) … TWO BUBBLES.

Considering the solid local job market, these sales declines are worrisome — even if they’re simply a signal that “pent up” demand has been largely satisfied and folks are spending elsewhere.

The local housing and auto industries have economic tentacles that touch numerous folks outside of their own words and their pain can spread widely.